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Tertiary Sector

COVID-19 Impact on Himachal Pradesh Economy

3) Tertiary Sector

a) Transport Storage and Communication and Transport by Other Means

Transportation is part of the tertiary sector and has important role in the economy of the State.

Absence of other means of transportation through airways and railways makes road transportation play an important role in the hilly terrain. Following figure gives the contraction in this sector:

Figure 3.4

Growth Rate of Transportation and Communication and Transport by

Other Means

Transportation by other means has the highest dip of (-) 28 per cent whereas, Transportation, Storage and Communication has -16.2 per cent fall in 2020-21 (A) due to COVID-19.

b) Tourism and Hospitality Sector

Tourism remains the main source of revenue generation and employment in the State.

COVID-19 forced lockdown which caused the worst hit to the tourism sector in the State.

The following figure presents tourist inflow in the State since 2010.




3.7 3.1


-20.0 -15.0 -10.0 -5.0 0.0 5.0 10.0 15.0

2018-19 (SR) 2019-20 (FR) 2020-21 (A)

Manufacturing ( Organised &

un -Organised) Construction

2.5 4.5


7.8 5.6

-28.0 -30.0

-25.0 -20.0 -15.0 -10.0 -5.0 0.0 5.0 10.0

2018-19 (SR) 2019-20 (FR) 2020-21 (A)

Transport,Storage & Communnication Transport by Other Mean

27 Figure 3.5

YoY Growth Rate of Tourist Inflow

Note: The data for these figures pertains to calendar year Source: Tourism Department, Govt. of Himachal Pradesh

Arrival of tourists sees a variation in terms of year-on-year growth rate in the state. However, a large variation in the growth rate is seen in the time of countrywide lockdown which not only forced domestic tourists to stay locked in their homes, but led to foreign tourists staying back in their countries due to

ban on international flights. The table below shows the highest (-81.33 per cent) contraction in the arrival of tourists compared to the previous year.

The following table 3.2 presents the index of tourist inflow in the state.

with the 2010 as the base year.

Table 3.2

Index of Tourist Inflow in the State (Base year 2010)

Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Domestic 113.99 122.12 114.86 124.30 133.66 140.48 149.32 125.62 131.36 24.75 Foreigner 106.81 110.29 91.32 85.91 89.53 99.81 103.83 78.61 84.41 9.41 Total 113.75 121.72 114.05 122.98 132.15 139.09 147.76 124.01 129.75 24.22 Note: The data for these figures pertains to calendar year

Source: Tourism Department, Govt. of Himachal Pradesh

In 2020 the arrival of tourists was 24.22 per cent as compared to the tourist arrival in the year 2010. In other words there was (-) 75.88 per cent

contraction in the tourist arrival in 2020 compared to the tourist arrival in 2010.

The arrival of foreign tourists saw the highest contraction of (-) 90.59 per cent in 2020 as compared to 2010.

13.75 7.00


7.83 7.46 5.24 6.24

-16.08 4.63

-81.33 -100.00

-80.00 -60.00 -40.00 -20.00 0.00 20.00

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020


28 Figure 3.6

Trend of Inflow of Tourist in the State (Base year 2010)

c) The Impact of COVID-19 on Health Sector

Due to COVID-19 there were obvious strains on available health infrastructure. There was diversion of resources from other sectors to the health sector for initiatives to tackle COVID-19. Impact on the vaccination drive due to restrictions was also observed on health targets of the State shown in the table 3.4:

Table 3.3

Effect of COVID-19 on Child Vaccination in the State


Apr-19- Dec 19

Apr-20- Dec 20 A Children given vaccination

after 12 months Measles &

Rubella (MR)- 1st Dose

41 21

B Number of Children more than 23 months who received:

1 Children more than 5 years given DT5

77,923 15,744

2 Children more than 10 years given TT10

75,158 10,701

3 Children more than 16 years given TT16

79,085 8,864

Source: National Health Mission, Govt. of H.P.

The 1st dose given to children of age more than 12 months of measles &

rubella has been affected and similarly the doses of DT5, TT10 and TT16 given to the children of age more than 23 months have also been affected to a large extent due to this pandemic as compared to the previous year.

Table 3.4

Family Planning Programme

Indicators April,2019 to Dec.,2019

April.,20 to Dec.,20

NSV 194 11

Laparoscopic sterilization

4,037 81

Minilap sterilization

246 105

PP Sterilization 1,125 963

PA Sterilization 109 26

IUCD Insertion 7,474 6,146 PPIUCD Insertion 2,695 2,575 PAIUCD (within

12 days of abortion)

118 48

Antara 4,143 3,234

OCP cycle distribution

2,16,358 1,72,429 CC distribution 28,64,042 24,75,548 Source: National Health Mission, Govt. of H.P.

114.0 122.1 114.9 124.3 133.7 140.5 149.3 125.6 131.4 24.7

106.8 110.3 91.3 85.9 89.5 99.8 103.8 78.6 84.4 9.4

113.7 121.7 114.1 123.0 132.2 139.1 147.8 124.0 129.7 24.2

0.0 50.0 100.0 150.0 200.0

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Domestic Foreigner Total

2 per. Mov. Avg. (Total)

29 Every component of the State Government’s family planning programmes has been hampered severely by this pandemic.

3.3 State Initiatives to Tackle COVID- 19 Impact

Much before the first COVID-19 confirmed case was reported on the 20th of March 2020, Himachal Pradesh adopted a multi-pronged strategy in dealing with the pandemic. It is Himachal Pradesh’s unique strengths of a well-established public healthcare system and decentralized governance that have contributed to the effective handling of the pandemic. The Government of Himachal Pradesh was among the first in the country to take the precautionary step of implementing a strict curfew, not just a lockdown, but to timely control the spread of the coronavirus. Subsequently, the State Government scaled up COVID-19 testing rapidly, so much so that between 28th March 2020 and 29th April 2020, a jump of 3500 per cent in the number of people tested for coronavirus was witnessed. Hon’ble Prime Minister of India, in a video conference with the Chief Ministers of all States, appreciated the Government of Himachal Pradesh for effectively implementing the Active Case Finding (ACF) campaign. Under ACF, approximately 16,000 ASHA (Accredited Social Health Activists) and Anganwadi workers went door-to-door to collect health information of every individual residing in the State (approximately 70,00,000) after the State-wide curfew was implemented. This data wasshared with the Department of Healthand individuals who showed Influenza-like-

symptoms were then tested for coronavirus.

Anticipating the adverse scenario that could emerge, the Government of Himachal Pradesh undertook various initiatives to arrest the impact of COVID- 19 on the State’s economy and lives of the people. These include infusion of money into the economy through direct and indirect support, ensuring food and shelter for the needy, generating employment opportunities, increasing production of agriculture and industrial sector, and support to those who returned home from other States. The Government disseminated information about the spread of the pandemic and the containment strategies adopted by it.

3.4 Timely Intervention of the State Government to fight the COVID-19 pandemic is given below:

1) Inter-state and Intra-state movement was suspended.

Movement of essential goods was permitted and regulated.

2) Detailed measures to disinfect the buses, IEC material regarding prevention, control and helpline numbers were displayed in buses/taxis. Detailed protocols were issued to be followed in banks, offices and commercial establishments like shops.

3) Masks and hand sanitizer were put in the essential commodities list.

4) State Government installed a COVID-19 helpline number (104).

5) Dedicated COVID-19 Care Centres (DCCCs) were created for the quarantine of all international passengers, interstate travellers, and contacts, who did not have a facility for

30 quarantine at home as per guidelines. COVID-19 hospitals were designated for the management of symptomatic patients.

6) Physical distancing was maintained to avoid spread of virus from infected people. For this purpose, all social, cultural, sports, political, religious, academic, family mass gatherings of any kind for any purpose were banned in the State. A roster of employees was prepared and 50 per cent of Class-III and Class-IV employees attended office on alternative days. Timings of arrivals and departures of employees were also staggered to prevent gathering.

7) The State Surveillance Unit was notified as a competent authority for surveillance, prevention and control measures of epidemic- prone diseases in the State.

Similarly, the District Surveillance Unit was also notified.

8) Dedicated COVID-19 Care Hospitals were notified all over the State.

9) Emergency Operations Centres (EOCs) at the State level in each of the 12 districts were set up.

10) Ear-marking ambulances for each district to be deployed as per the direction of the respective Chief Medical Officer

11) To ensure uninterrupted supply of essential goods/services, shops or stores selling groceries, milk, bread, fruits, vegetables, meat, fish and other uncooked food items, Chemist shops, optical stores, banks, insurance services and ATMs pharmaceutical units

and their ancillaries were kept open with the condition of adherence to standard operating guidelines.

12) Curfew e-passes were issued on WhatsApp for movement of people and essential goods in the State.

13) Public offices remained closed until 02.05.2020, except for offices charged with essentials and emergency services.

14) Curfew timings were relaxed for buying essential items.

15) Families in the State under the National Food Security Act (NFSA) were given quota of food grains for two months in April itself on a priority basis.

16) Social security pension for widows and physically challenged people was increased to `1,000 per month.

17) Because of the upcoming apple season, which continues to be a source of livelihood for a majority of the State’s population, three hundred plant protection centres were kept open to facilitate farmers.

18) HP COVID-19 Solidarity Response Fund was set-up to send essential supplies like PPE kits, masks, sanitizer etc. to health workers and food and medicine to communities.

19) The Government took various steps to ensure appropriate returns to growers on fruits in general and apple in particular. Himachal Pradesh Government has co-ordinated with other State Governments (Haryana, Delhi, U.P. Punjab, Rajasthan) to ensure timely availability of labour, raw

31 materials, cartons and other materials at reasonable rates.

20) Special arrangements were made to take imported high-yielding high-density apple plants from controlled atmosphere (CA) Store to post-entry quarantine (PEQ) sites.

3.5 Resource Mobilization by the State Government

3.5.1 From Own Sources

1) Salary cut of 30% for the Public Representatives, Chairpersons and Vice-chairpersons of Boards and Corporations.

2) Imposition of cess on the sale of liquor, which led to an additional income of `100 crore to the State exchequer.

3) No increase in Dearness Allowance for employees and Dearness Relief to pensioners.

4) PDS system and power tariff has been rationalized.

3.5.2 Interest-Free Loan from GoI 1 Government of India provided

interest free loans amounting to ` 450.00 crore. Out of which First Instalment of ` 225.00 crore has been released. Repayment Period for this loan is 50 years.

2 Amount released to roads and rail: ` 72.33 crore.

3 Amount released for water supply and management: `41.49 crore.

4 Amount released for others facilities: `11.18 crore.

5 Following additional investment of about ` 100 crore was made to strengthen Health Sector to fight the impact of COVID-19:

i) `47.71 crore for Super

Specialty Block, Chamiyana.

ii) `30.35 crore for New OPD Block, IGMC

iii) `11.81 crore for completion of AIIMS, Bilaspur.

iv) `10.66 crore for Mental Health Centre at RPGMC Tanda.

Table 3.5

First Response to COVID through Banks

Assistance till Jan 2021

Accounts ` in crore Over Draft to PMJDY


16,142 3.04 Credit to Women

SHGs (5000 per member subject to INR 1 lakh)

1,278 22.88

10% of Sanction limit for investment activity to KCC Accounts (From INR 10,000 - 30,000)

64,491 487.43

KCC saturation for PM Kisan Nidhi beneficiaries

including fishermen

50,410 892.04

Total 1,32,321 1405.39

Source: Finance Department, Govt. of H.P.

Table 3.6

Central Assistance for COVID-19 Crisis

Assistance till January, 2021 (`in crore) First Response to the Lockdown 1,405 PM Gareeb Kalyan Yojna 472

ANB Tranche-1 1,465

ANB Tranche-2 101


Liquidity Support 3,443

Total 7,161

Source: Finance Department, Govt. of H.P.

32 3.6 Immediate Relief by State


1) Social Security Pension has been paid to 5.69 lakh persons in advance every month for the quarter ending June 2020.

2) The pension amount admissible for the old and specially abled has been increased from ` 850 to

`1000 per month w.e.f. April 2020.

3) All the Ration-card holders of targeted PDS have been given Rice, Wheat Flour and Dal for two months in advance.

4) Enhanced emoluments paid to Aanganwari Workers/Helpers/

Mini Aanganwari Workers, Mid Day Meal Workers, Silai

Teachers, Panchayat

Chowkidars, Para Fitters, Para Pump Operators, Jal Rakshaks, Namberdars from April 2020.

5) ASHA workers have been paid an additional incentive of ` 1000 in the months of April, May and June 2020 (`3.13 crore) while during July to December 2020 the incentive has been increased to

`2000 (` 9.44 crore.).Thus total relief amounting to ` 12.57crore was paid to ASHA workers.

6) Increased emoluments equal to 25% of the grade pay was paid to contractual employees

7) Conveyance Allowance to the blind and orthopedically challenged employees increased from `500 to `750 PM.

8) Daily Wages were increased for various categories from `250-

`520 to `275-`572 from April 2020.

9) Per Hour Rates of Part-time Workers was increased from

`31.25 per hour to `34.50 from 1st April 2020.

10) Advance payment of Wages/

Honorarium etc. to the Daily Wage Workers, Part Time Workers, Water Guards etc.

11) Ex-gratia payment of `50.00 lakh has been proposed for Non- health and Non-sanitation workers doing COVID-19 duties in addition to health and sanitation workers who were already covered under the scheme. This is in addition to the normal ex-gratia (`35000 to

`100,000) given in case of death of a government employee in service.

12) State Government decided to release the benefits of retirement/death gratuity to NPS employees retired/died in harness between 15.05.2003 to 21.09.2017 despite having a weak financial position and COVID-19 crisis. An amount of

`110.00 crore has been released during the current financial year.

3.7 Help to PSUs

 State Government has released total Grant/ Equity/Subsidy amounting to ` 570.00 crore to the Himachal Road Transport Corporation (HRTC) in addition to the budgeted grant for the current year, `258.00 crores over and above the budgetary provisions.

 State Government has released an additional sum of `40.49 crore to the Himachal Pradesh Tourism Development Corporation (HPTDC) during the current financial year, keeping in view the impact of COVID-19 pandemic.

33 Table 3.7

State Disaster Response and COVID Fund (` in crore)



Total Health/NHM 15 16.2 31.20

HRTC - 13.16 13.16

Police 0.50 12.89 13.39

Others - 3.09 3.09

State Election Commission

- 1.41 1.41

ULB/MC - 1.2 1.2



51.4 1.05 52.45 Total 66.90 49.00 115.90

Source: SDMA, Govt. of H.P.

3.8 Relief for Affected Sectors a) Energy Demand Charges

deferred for six months to the Industries and hotels in which

`35.00 crore has been spent.

b) Industries and hotels have been charged domestic rate of water supply for 6 months at cost of approximately `1.00 crore.

c) It was also decided to give approval for extension of Excise Policy, 2019-20 upto 31st May, 2020 and operation of Excise Policy 2020-21 from 1st June, 2020 to 31st May, 2021. The retail excise licensees were not be required to deposit any excise levies for the period liquor vends remained closed due to the COVID-19 lockdown after 22nd March, 2020.

d) The Government also gave its approval of extension of Toll Policy 2019-20 upto 31st May, 2020 and operation of Toll Policy 2020-21 from 1st June, 2020 to 31st May, 2021. The Toll Lessees

were allowed to deposit monthly toll fee for April and May, 2020 on the basis of their actual collection of toll fee.

3.9 Direct Transfer of Money

 State Government has transferred

`2000 per month from April to June, 2020 in the accounts of 1.26 lakh workers registered under the Building and Construction Workers Welfare Board. Total benefit released was `75.00 crore approximately. In addition, the board has also provided support to the registered workers towards health needs, marriage and education of their children for which a sum of `7.33 crore was released.

 Financial assistance @ ` 2000 per fisherman (Total `1.07 crore) to 5,350 registered Fishermen of Govind Sagar, Koldam, Ranjeet Sagar, Chamera and Pong Dam Reservoirs has been transferred.

 Compensation to 592 Flower Growers to the tune of `4.00 crore has been transferred.